Apollo Acquires Trace3 from American Securities

Apollo Funds are set to acquire Trace3, a prominent technology solutions provider, from American Securities. This strategic move signals Apollo's continued interest in the IT services and digital transformation sector, a market experiencing significant growth driven by cloud adoption and the increasing demand for advanced solutions in areas like artificial intelligence and cybersecurity.

Trace3, established in 2002, has carved out a strong national presence by offering comprehensive IT solutions to enterprise and commercial clients, including a substantial portion of the Fortune 500. The company boasts deep expertise across critical technology domains such as hybrid cloud, data analytics, managed services, and cutting-edge technologies. This acquisition positions Trace3 to further capitalize on the accelerating digital transformation trends and the burgeoning need for AI-powered infrastructure and services.

While financial specifics of the transaction were not disclosed, American Securities will maintain a significant minority stake, indicating their continued belief in Trace3's growth potential. This structure suggests a collaborative approach to the next phase of the company's development. Trace3 CEO, Rich Fennessy, expressed enthusiasm for the partnership with Apollo, highlighting the alignment in their commitment to innovation and client relationships, and anticipating accelerated growth while preserving the company's distinct culture.

Apollo's investment strategy in the IT services sector is well-documented, with previous successful ventures including investments in companies like Presidio and TD SYNNEX. This experience provides a strong foundation for supporting Trace3's expansion. Robert Kalsow-Ramos, Partner at Apollo, emphasized the opportunity to bolster Trace3's capabilities in meeting AI-related client demands and expanding high-value service offerings, potentially through strategic mergers and acquisitions.

The IT solutions market is a dynamic arena, with global spending on IT services projected to reach substantial figures in the coming years. Companies like Trace3 are vital enablers of this digital shift, providing the expertise and infrastructure necessary for businesses to navigate complex technological landscapes. The integration of advanced AI capabilities, robust cybersecurity measures, and scalable cloud solutions are key differentiators in this competitive space.

American Securities, which has supported Trace3's scaling and capability expansion, views this as a continuation of their strategy to partner with market leaders. Kevin Penn, Managing Director at American Securities, looks forward to continuing the collaboration alongside Apollo and the Trace3 management team. The transaction is subject to standard closing conditions and regulatory approvals.